The Death of Market Fundamentalism

Edited by Luca Cacciatore

It is of utmost importance to everyone involved at New Conservatives, that working class-oriented economic ideas are given the light of day. This article serves as the first of these endeavors. “Market fundamentalism” is used variously throughout to describe adherence to market based solutions even at the expense of large swaths of demographic cohorts. Similarly, the term “neo-mercantilism” attempts to focus upon the main culprit of the current anti-worker economic dynamic, which favors a sort of corporate mercantilism reminiscent of the East India Companies of the past – one where the shareholders get richer, the workers are paid poorly, and the cheap goods are lauded; all until eventually, it becomes unsustainable.

 

Though originating as an economic system to combat Soviet communism and its own sinister expansionism, the Bretton-Woods consensus of an open market subsidized directly by the United States has waned little since their collapse. In fact, it would not even see its peak until shortly after the fall of the Berlin Wall. “America had won the Cold War”, and “free trade was the reason” – as was commonly understood. During the post-Reagan neoliberal decade of the 1990s, in which both Bill Clinton of the Democrats and George H.W. Bush of the Republicans, in the same election, adopted bold free trade doctrines; the policy implications of Bretton-Woods were only emboldened. Beating the Soviets, to this establishment, was an indication that free trade not only held strategic advantages in isolated cases, rather, it was almost a divine right. Multilateral deals to achieve a common market, at the expense of domestic labor and production, were trade-offs we “just had to deal with” from now on. This was the first time in American history large corporations opposed tariffs, in the past being among their strongest advocates. With the arrival of multinationals and outsourcing, that old school died with it. The new goal of the state was to make America a nation of consumers, no matter the costs. Costs included ranged from mass migration to drive down wages, to union-busting, to entire industries like manufacturing leaving and not taking their old workers with them.

What would be expected from a traditionally responsible government, one which adhered to the Hobbesian social contract we have come to expect, would flower a wholistic system of trade that refuses to discriminate exorbitantly against the American worker. Remarkably, this negligence is precisely what the government has subscribed to; the effects visible virtually everywhere. American wages have been essentially stagnant for around 25 years, people are moving out of their hometowns and cities in the midwest at alarming rates, and the cost of college and other primary costs have skyrocketed. We are told to “go West and frack”, even when state after state is banning the practice. Possibly worst of all the consequences, are deaths of despair from causes such as alcoholism, drug abuse, and suicide which climb year after year. Nearly all this stems from a failure to adopt a coherent industrial policy, one that protects producers from the nonexistent competitive advantage theory we have been told is still prevalent without retaliatory measures. The reason that the American government has permitted and has even endorsed all of these catastrophic effects of free trade to be bestowed upon the working class, is precisely because the government has been committed to the Lockean liberal fantasy of a consumer led welfare state, which of late has proven unsustainable. This fantasy is still, to this day, furthered by the corporate class – attempting to usher in an age of neo-mercantilism in which every avenue of choice is limited and the oligopolies featuring depressed wages reign over every industry.

Non-profit Think Tanks, such as the Cato and American Enterprise institutes, have been fundamentalists against even the idea of retaliatory tariffs for quite some time. The American Enterprise Institute, until relatively recently, was even skeptical of them in response to Chinese currency manipulation and dumping practices. Both of these institutes, and others like them, have dominated in the conservative movement for decades now; only recently losing influence in the Trump Administration and looking to other avenues (Such as the Democratic Party) to continue their neo-mercantilist aspirations. With the rise of the Lincoln Project, the neo-mercantilism is practically worn on their suit pins – to them global capitalism is a higher value than tradition or even fair domestic competition itself. 

Ever so presiding is the constant nuisance from the World Trade Organization (WTO). They constantly irritate the United States to fight unfair trade practices by China through “globally friendly means”, yet this only serves as tying two hands behind our back by excluding effective measures like the tariff. Some elected officials, however, are noticing this dilemma. Senator Josh Hawley of Missouri recently wrote an opinion editorial explaining why the WTO should be abolished. The Senator wrote: “President George H.W. Bush promised a “new world order” of “open borders, open trade … and open minds”… That new order’s universal peace never quite arrived. Instead, the internationalists embroiled America in one foreign war after another. And their liberal economic order fared little better. It sent American production overseas, compromised American supply chains, and cost American jobs, all while enriching Communist China.” Senator Hawley’s analysis of the WTO is on point: While our enemies grow richer, our CEOs are also growing richer, yet the working class grows poorer, subjected to programs like welfare or dead-end jobs – being forced to compete with foreign labor getting paid a tenth of what they are, increasingly even in their own backyards. For these reasons it must be stated that the WTO is not a pillar of freedom and democracy; it is a totally useless institution that, for the sanctity of our own trade security, should either be reformed to prioritize the rights of the domestic working classes, or should be abandoned outright.

Those that disagree with the arguments aforementioned, could perhaps point to GDP as their metric. One such organization that subscribes to an almost dogmatic view of the GDP measurement is the World Bank, whom states on their website:

“In 2017, trade volumes grew by 4.3%, the fastest rate in 6 years. Behind increased trade levels are countries whose GDP is growing, companies who are trading goods across borders and citizens who can access goods and services at lower prices. To further enhance global trade, the World Bank works with governments to address trade obstacles by designing and implementing policies that maximize competitiveness” The first problem in this statement by the World Bank is that GDP is a valid measure of a healthy, balanced economy – yet this is not necessarily true. GDP might show how strong corporate growth is, or how much consumption is gained, yet despite semi-impressive GDP numbers before the pandemic staggering amounts of Americans, especially in the heartland, are dying from deaths of despair or otherwise unable to meet the threshold for basic necessity costs. 

Via Oren Cass, “Cost of Thriving Index”

Adding the effects of the ongoing pandemic, one can only expect these problems to skyrocket. Well Being Trust and The Robert Graham Center have already published a study indicating that there could be almost 75,000 deaths of despair from the lockdown measures. This is simply not the formula for a healthy society. 

Neoliberals, like the World Bank, are not the only people arguing to undermine the working class through neo-mercantilist measures. There are also the libertarians, who unlike their neoliberal counterparts, don’t care much to hide it. Rather than supplementing the newly created paupers with a welfare system, their solution is, unsurprisingly, to do nothing. One such organization that subscribes to this is the previously mentioned Cato Institute, which states on their website “Trade and globalization have provided undeniable economic benefits for the vast majority of American families, businesses, and workers. Most obvious are the consumer gains. Several recent studies have found that freer trade with China, for example, has generated, through increased competition and lower prices, hundreds of billions of dollars in U.S. consumer benefits.”  Similar to the World Bank and other neoliberal organizations alike, Cato’s libertarian outlook is failing to realize that although consumer prices fall – necessities such as a home, a car, food, college, and many more are actually drastically increasing in price. Americans are losing their good-paying jobs to foreign nations and are left incapable to pay for the rising prices for services and goods they actually need. What Cato seems to suggest is that it is perfectly fair and just that a father of four loses his job of 25 years at a factory in Detroit – as in a free global market, his labor is better spent elsewhere. Where that labor is found is an idealistic shot in the dark at best, negligence at its worst. To quote Tucker Carlson “Does anyone still believe that cheaper iPhones or more Amazon deliveries of plastic garbage from China are going to make us happy?” It appears the Cato Institute not only thinks it will make America wealthier, but that consumerism is actually a better virtue than the dignity of work. 

Hope is not all lost, America can still recover. The Election of Donald Trump showed that there are those willing to tackle the consensus. The victory of Donald Trump, after all, was partially due to Hillary Clinton’s utter failure to appeal to the working class voters of the midwest, many of which have lost jobs directly from the neo-mercantilist policies of elder year. With the rising stars of Senator Josh Hawley on the right, and Senator Sherrod Brown on the left, free trade-skeptical forces within both parties can be channeled to challenge the fossilic neoliberal/libertarian consensus. The great Republic is salvageable from this neo-mercantilist era just as it was in the Gilded Age. Through a grandeur synthesis of diverse economic incentives, including strategic trade confrontation and industrial policy, America can once again ascend to the shining producer creed of the modern world once more. As Tocqueville states in Democracy in America:

“I cannot help fearing that men may reach a point where they look on every new theory as a danger, every innovation as a toilsome trouble, every social advance as a first step toward revolution, and that they may absolutely refuse to move at all.”

Sources

 

Hawley, Josh. “The W.T.O. Should Be Abolished.” The New York Times, The New York Times, 5 May 2020, http://www.nytimes.com/2020/05/05/opinion/hawley-abolish-wto-china.html.

“Stronger Open Trade Policies Enable Economic Growth for All.” World Bank, World Bank Group, 3 Apr. 2018, http://www.worldbank.org/en/results/2018/04/03/stronger-open-trade-policies-enables-economic-growth-for-all.

 Lincicome, Scott. “The Case for Free Trade.” Cato Institute, National Review, 2 May 2019, http://www.cato.org/publications/commentary/case-free-trade. 

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